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There are some potential problems to look out for with niches. One of the most prevalent is that of the fad niche. Fad niches might be wildly popular right now, but they do not provide solid long-term income potential.
A prime example of a fad niche is the Atkins diet. Just a few short years ago, the Atkins diet was all the rage. There were reports of people losing lots of weight on it, and it seemed that everyone was jumping on the bandwagon. Books about the diet sold like hotcakes, and the news was abuzz with Atkins success stories.
After the diet started getting lots of attention, food manufacturers started making foods that were designed with it in mind. These did reasonably well. Then fast food restaurants started offering low carb options. By this time, the diet was waning in popularity. The new menu options saw lukewarm sales, and the items offered in stores started sitting on the shelves a little longer. Even Atkins Nutritionals ended up filing bankruptcy.
There is money to be made with such fads, but only if you get on board early. Once the market is fully developed, it is usually so saturated that newcomers are hard pressed to get a piece of the pie. And even if you do catch it in time to make some money, you’ll have to constantly be on the lookout for new trends to maintain your level of income. So unless you’re in a position to catch wind of trends long before everyone else does, finding niches that have long-term profit potential is the soundest option.
One way to determine whether a niche has long-term earnings potential is by looking at its history. Various niche analysis tools allow us to do this, some in more depth than others. The Adwords Keyword Tool allows us to look at this by providing statistics about each keyword’s average performance as well as its performance over the past month. If a keyword has seen a recent surge in search volume, it might be a seasonal performer, but it might also be a risky proposition.
Another thing to consider when analyzing a niche’s profitability in the long haul is the performance of similar niches. Pop music, for example, tends to have a limited life span, so focusing on a particular artist or song in the genre might not be the best strategy. In situations such as this, you might be better served to broaden your focus just a little.
The best niches offer the opportunity for earnings for years to come, not just for a few weeks or months. Taking the time to find niches with steady money-making potential lets you fully develop your marketing strategy without having to keep one eye out for the next big thing.